Influencer marketing is taking the marketing world by storm. It is cheaper for businesses than celebrity endorsements and it typically has a higher return on the investment. There is hard data behind this shift to influencer marketing. Here are three influencer marketing statistics every business owner needs to know – and understand. We’ll give you the hard data on the trends and tactics used for influencer marketing.
The Decline of the Alternatives
Why work with an influencer to market your product? Because more than two fifths of millennials used ad blockers in 2015, and that rate is only going up as tools get more sophisticated and your audience gets younger. Nearly 70% of teens and young adults use ad blockers.
Conversely, the audience cannot escape an influencer wearing your branded T-shirt, demonstrating your product and talking about it in a podcast or online video. Nor can you expect video ads to take the place of other online ads, since more than two thirds of Generation Z skips even YouTube ads. Online ads on influencer videos are not a solution, since 60% of those surveyed say ads inconsistent with the influencer’s feed are fake and ignored.
Another issue is the censorship of entire classes of ads by Google. Whether you’re advertising hunting tours, weight loss products, payday loans, adult products, books by conservative authors or anything else Google doesn’t like, you simply may not be able to advertise via Google ads. Since Google controls over 90% of online ads, their discrimination against certain types of businesses means you may have to rely on influencer marketing to reach your audience.
Another reason to find influencer marketing channels is the decline of TV viewing among young adults. The average TV viewer’s age keeps going up. This doesn’t mean the younger generation has abandoned the screen. Instead, they are spending almost two hours a day on social media. Since they can choose their content source and switch to something else at any time, you have to find the influencers who have already caught the attention of your intended audience.
The Return on Investment
Let’s look at the hard influencer marketing statistics that show why influencer marketing has a high return on investment. Adweek reported that marketers receive almost seven dollars in earned media value for every dollar spent on influencer marketing. While email marketing promises a $38 return on investment for every dollar spent on average, you cannot be certain any of your own messages will get through a spam filter. Furthermore, email marketing works best with people who are already engaged, such as signing up for newsletters. Influencer marketing, in contrast, lets you put your message in front of a market segment with someone that the audience already trusts. Nor do you have to invest massive amounts of effort creating personalised campaigns, because you can crunch the numbers about the influencer’s audience and pick the influencer whose audience best matches your intended audience.
The return on investment actually varies depending on the product. If you’re promoting consumer packaged food goods like chips and candy, the ROI was found to be $14.29. For tourism and travel, it was $12.54. While nothing is as good as being there, sending a travel vlogger on a trip to post pictures and videos about it does seem to be almost as good. Beauty products had a $12.21 return on investment with influencer marketing, which is why beauty product boxes are being sent to any diva with an audience and some of the ones showing off new lipstick and hair products are making as much money as video game reviewers.
The ROI of initial customer acquisition is separate from the fact that people converted into customers through influencer marketing, seen as a type of word of mouth marketing campaign, have a 37% higher retention rate according to McKinsey. If you can get the social media buzz to take off after an influencer reviews your product, the positive referrals to the product are the word of mouth marketing you want these potential new customers to receive. And other real-life customers talking to would-be customers about your brand are about ten times more valuable than you trying to talk about your brand. Influencers can be seen as super-word-of-mouth marketing, since 40% of millennials say their favourite YouTuber understands them better than anyone else while 70% of teens prefer YouTube influencers over celebrities.
This makes influencer marketing especially important if you’re advertising to millennials and anyone younger; not only do they have the audience but it gives weight to their recommendations. Two thirds of teens and twenty somethings would buy a YouTuber endorsed product, according to a study by Variety. Compare this to the 3% of consumers who would buy something after a celebrity endorsement. When influencer marketing statistics say ten times as many (or more) of the audience will buy after the endorsement, why wouldn’t you start finding the right influencing marketers to partner with?
Another benefit of influencers is the fact that they keep their audience engaged across multiple social media platforms. You don’t have to figure out if your audience should be reached on Youtube, Facebook, Instagram or Facebook. The influencers do that for you, so the return on investment for influencer marketing can be even higher than these stats if your company is otherwise behind on social media. The influencer, in short, does that work for you.
The Shifts in the Industry
Since 2013, interest in the concept of influencer marketing increased more than 90-fold from 2013 to 2016. The practice has shifted from niche products using influencers to reach only the people interested in the product to mainstream brands working with top social media influencers to sell even more. This is why the earned media value or EMV increased 50% from 2014 to 2015 and continues to increase at similar rates year over year since then.
The relatively low cost of influencer marketing compared to the high rate of return is why eMarketer published a study showing that 85% of marketing professionals expected at least one campaign with an influencer in the next year. Of those that had run influencer marketing campaigns, four fifths found them to be effective. Econsultancy issued a report that found that social media stars were more relevant to their campaigns than anything else, whereas only a quarter said models and actors were. In 2016, three fifths of marketers said they would increase their influencer marketing budgets.
These statistics should be more than enough to convince you of the power of influencer marketing. Alternatives to influencer marketing are in decline, whether pop-up ads, search engine marketing or TV commercials. The return on investment with influencer marketing is among the highest of any form of advertisement and influencer marketing has more weight with the audience than celebrity endorsements. This is driving shifts to influencer marketing and far more spending on that type of marketing. The success of these campaigns is driving more and more businesses towards influencer marketing programs and more spending in this area.